Save money by understanding the Oracle licensing model – part I

Save money by understanding the Oracle licensing model – part I

Oracle and licenses. The general feeling most of the time is that you pay too much for the use of the Oracle products, and it’s not always sure if you are compliant, because of the complexity of the rules. This – hopefully clarifying – blog is part of a small series and is an updated blogpost of one I wrote a few years ago. Since then the (Oracle) world has changed a bit, felt the need to update, and I will try to give some clarity about the licensing model which will hopefully help you to save money by utilizing your Oracle Environment. I’ll start with the basics (part I) and then I will treat topics like virtualizing, engineered systems, SE2, Unlimited License Agreements, Cloud and so on.

The information in this post is not intended to be used as legal statements or sources for negotiations with Oracle. I will be referring to some other documents and blogposts which can and should be used. The information is not exhaustive but will hopefully give the reader a guide how to cope with the model of Oracle at this moment (2016).

Subjects in this part 1:

Scope : Full Use / Hosting

Development and testing environment

Prices and contract

Databases species

Types of licenses

Processor / NUP / Employee based

Support

Scope: Full Use / Hosting

The following models are to be recognized:

Full Use = end-user license, suitable for running tailor-made applications. The legal entity of the firm is owner of the full-use license.

Application Specific Full Use (ASFU) = Example: SAP. You can only use the Oracle software for that particular purpose. Not even allowed to use Enterprise Manager Packs.

Embedded Software License (ESL). Only to be used for specific to be used applications, and the database schema is not accessible to the end user but only to the application (runtime).

Hosting licenses (more detail in a coming post):

Generic Hosting. Third party or multi application hosting. Multiple customers

Specified End Users. Hosting Environment dedicated to a single end user.

For the Hosting licenses approval is needed by Oracle !

Scope in this post: ‘Full Use’ – model, in a post later on I will talk about the different Hosting licenses (which is different from Cloud-credits ! ).

Development- and test- licenses

You may use the Oracle software free for generally 30 days , after downloading and installation. This period may sometimes be extended to (generally) 90 days after consulting Oracle, and is used for ‘proof of concepts’ and that kind of stuff.

Development- and test- environments for an application must be licensed, with at least one rare exception.

The exception and the rules around development and testing I described in this blog.

Prices and contracts, what are you paying for

First year’s costs can be calculated as: ( purchase – purchase discount) + support costs (22%). Support costs are calculated of the purchase minus the discount.

You get support as long as you pay the yearly support costs. Oracle has the right to increase the support amount with a few percent a year. So when you are a local customer for a decade or so, the support costs may be substantial higher, and may not be in proportion anymore with the discount you got at the beginning.

Licenses without support of perpetual licenses is possible (first year support is mandatory), but then you have got no access to Metalink support, patches and upgrades. Be aware, there’s a huge difference between stopping the support, and eliminate the license. When just stopping the support, you will still be the owner – in the case of perpetual license – !! When you made a mistake, and want to get into support again after a period of time, you’ll have to pay a so-called re-instatement fee. This is all explained in the Oracle Software Support policies.

Purchase is also possible for a period of 1, 2, 3, 4 or 5 years (Term Licenses), purchase support is mandatory – which isbased on the price of the perpetual licenses!.

More on support later on.

On www.oracle.com are the so-called ‘list-‘ prices in dollars. These are the prices with no purchase-discount at all. This discount depends greatly on the volume you buy, and there are some fixed ‘staggered’ discounts you can agree on with Oracle. By the way: the discount is based on the sum of the purchases. When you decide over time to end a part of the purchase, this will lead to a recalculation, and could be influencing your yearly costs, because of stumbling into a lower staggered discount.

Prices will be adjusted on a regular basis. Changes will occur within June, see also this blog. For Europe, changes will also depend on the rate of the dollar.

Oracle has also a so-called ‘Matching Service Level Policy’: sometimes it does not matter what you are using, but it does matter what you bought in the past. Example: you purchased database licenses for 3 servers together with 3 diagnostic and tuning pack licenses. Termination or stopping the support of the diagnostic and tuning pack licenses is not allowed. Those management-packs are linked one on one to the databases, consequence is that you have to terminate or stop the support of the databases as well. Oracle does not pro-actively monitor this at this time.. only on an order-by-order basis, and when customers try to de-support a part of the license stack later in time. So it helps sometimes to act low-profile….

Species of databases

Enterprise Edition. Most expensive, complete database.

Standard Edition 2. Less functionalities, e.g. no online index rebuild, on servers with a maximum of 4 sockets and limit itselfs to 16 threads. But includes RAC. A lot of questions are answered by this blog.

Types of licenses

Processor based (Proc)

You pay per processor, but a processor according to the definition of Oracle. As the processors become increasingly powerful and have multiple cores, Oracle has created a “core element”.

For Intel and AMD dual-core CPU typically a factor of 0.5 for each core is used, so Oracle will count this processor as 1 Oracle processor (2 cores x 0.5 = 1). This is no different from the number of CPUs in this case. But customers also uses servers with 2 quad core cpu’s. Suppose this has also a factor of 0.5, so Oracle will count this as four processors: 2 CPUs x 4 cores = 8 cores. 8 cores x 0.5 = 4 Oracle processors.

Thus, if a database on a server is installed on two quad core processors running as previous example, 4 processor licenses must be paid for. On that server you are free to install multiple databases, regardless of the version! The processor-based license is paid per server and not per database.

Another example:

Oracle is not supporting virtual servers, except their own OracleVM solution. As a consequence, when using virtualization with VMware for example, the underlying number of hardware processor are calculated.
Extreme example: on a cluster ESX (VMware) with 3 nodes, each with two quad core processors, a VM is created. On a VM is an Oracle database installed, and one (1) virtual processor is assigned. This virtual server is actually only uses one core of the available 24 (3 nodes x 2 CPUs x 4 cores). License-wise you pay the underlying hardware (24 cores). When the factor of the CPU concerning is e.g. 0.5, then you will be settled on 24 cores x 0.5 = 12 processors for this one database.

Named User Plus (NUP)

What does it mean:
• A person in any way data viewing and / or importing data into an Oracle database
• A non-human operated device. This may be scanning robot for example, but also an information board at a station, if it also actively approaches the database. A batch process, however, is not considered as Named User. This is an escape worth thinking of !
• With multiplexers (such as application servers) the real users are counted and not just the user that the database approaches.

When the application server is connected to the outside world (web application), it is not possible to license under NUP, and you have to buy processor-based licenses. But this is negotiable. When you can prove that only a few users in the outside world can have access to the inside, it may be licensed under NUP’s.

The name also suspect that there’s a “Named User” license exists without ‘Plus’. In the past it did exist indeed, but with the recent licensing change, this was changed in NUP.

A named-user is attached to Oracle software, but with a minimum purchase. You may not purchase a database license with e.g. 2 named-users. Oracle will take the server as base. For an Enterprise Edition is a minimum purchase of 25 users per processor (definition of Oracle) required, for a Standard Edition-2 a minimum purchase of 10 per server. An application server 10 per processor.

Example 1:

Example 2:

Employee based (Emp)

This is all the staff:

Full-time

Part-time

Temporary staff

Hired consultants

Staff of companies which are executing the outsource of that company.

This type of license is for a limited number of products possible, for example BI Publisher.
Not the users of the system are counted, but the number of people who are employed, fixed, temporary or outsourced.

Support

Oracle has got a Lifetime Support Policy , This means that there is always support for different versions, but is limited after the ‘normal’ support period (five years after general availability date).

Premier support usually ends five years after the release of a version. When a customer really wants it, he can buy off the same level of support by switching to extended support.

For extended support you’ll have to pay extra:

Year 6 after product release: 10% of current year’s Software Update License & Support

Year 7 after product release: 20% of current year’s Software Update License & Support

Year 8 after product release: 20% of current year’s Software Update License & Support

Extended Support offers the following:

Updates, fixes and security alerts

Tax, legal and regulatory updates

Upgrade scripts

Technical support

Major product and technology releases

Quotes Oracle for sustaining support:

Sustaining Support will be available for as long as you license your Oracle products. With Sustaining Support,you receive technical support, including access to our online support tools, knowledgebases, andtechnical support experts. You benefit from

Major product and technology releases

Technical support

Access to My Oracle Support

Fixes, updates, and critical patch updates created during the Premier Support stage

There’s no ‘evidence’ unfortunately. Oracle is not eager to sell licenses without support. Yearly support costs is the lifeline of Oracle. Never done this myself by the way. Ask your Oracle representative about this.
I doubt there will be much discount by the way :-). Maybe better to either buy perpetual and terminate the support after a few years (draws the attention of LMS…), or buy a 1,2,3,4 or 5 years license.
See the pricelist : “Term licensing available for all Oracle Products. The list price for a term license is based on a specific percentage of the perpetual license price. Annual terms licenses are available from 1 to 5 years: 1 year – 20% of list; 2 year – 35% of list, 3 year – 50% of list, 4 year 60%
of list and 5 year 70% of list. Support for all term licenses is 22% of net perpetual fee“

If this is a fysical user (not a general account in the database several users are using), so let’s say mr.Smith, and he is using several databases on the same server he will be counted as 1. If you are moving 1 of the mentioned databases to another server, he must be counted twice. Also be aware of the rule of a minimum of 25 NUP’s per Oracle processor when you are using Oracle database Enterprise Edition and got intentions of licensing for NUP’s. So it may be very expensive to move database around…

Oracle starts asking questions when the number of licences of management packs doesn’t match the number of database licenses. In your example, with the assumption that there are 72 different users (when there are users which use several databases they can be counted as 1), Oracle expects 72 pack licenses – in your example 72 NUP’s diagnostic and 72 NUP’s tuning pack (a tuning pack must be licensed together with diagnostic pack).
However, this ‘rule’ is based on the following in your OLSA:

“The number of licenses for the programs listed below must match the number of licenses of the assosiated database and if you purchase Named User Plus licenses for these programs,you must maintain, at a minimum, 25 Named Users Plus per Processor per associated database:
Real Application Clusters, Partitioning, OLAP, Data Mining, Spatial, Advanced Security, Label Security, Diagnostic Pack, Tuning Pack, Change Management Pack, Configuration Pack“

This rule applies per databases, so when you don’t want to use the packs for a particular database, you must be prepared to prove that you don’t use the packs. In your case: use the parameter ‘control_management_pack_access’ and disable the packs in Enterprise Manager for that instance. See also license information of Enterprise Manager.
And Oracle may only accept this when there’s no use of the packs in that instance for at least a few months.
Regardz.

Rehman
June 5, 2014 at 7:34 pm

I purchased Oracle Standard Edition for Named users (25) in Year 2010, i never used Meta link support. do i need to renew my license yearly even if i am not intrested in technichal support.
Thanks

Hi, your questiong comes down to “what am I paying for”. When paying support costs you have the right to contact support, but also gives you the right to download releases and patches. In general: you’re login-account at My Oracle Support. Support costs for perpetual licences are optional, so you may cancel your support costs for a contract when you are sure you don’t need support for that installed version in the future. Be sure only cancel the support costs, not the license. And also be aware of the fact you are drawing the attention of Oracle sales and License Management Services. Especially when you have got more Oracle contracts.

In addition, following a contract, my old Metalink ID is usually terminated.

I’m interested in getting a full featured Metalink account for research/training purposes (pay support lic. and keep Metalink ID). If I were to purchase Oracle 12c Personal Edition, $92 for one user and 101.20 for support, would that support give me unfettered access to all the wonderful goodies on Metalink or is the account restricted in some way? For example, if I’m researching how to apply rolling patches to a RAC n-node cluster, I would need access to those patches, even though it not the version I would purchase to gain access to said site.

I look forward to your response.

Thanks for the info Job. Nice site.

Thanks,

jr

Maysarah
August 8, 2014 at 11:37 am

Many thanks for your article, it was to the point and full of useful information

Sorry for the very, very, late response.
When you get a CSI-number from Oracle, you will get unfettered access to Metalink, account is not restricted.
Researching how to apply rolling patches is not a problem. As long as you don’t use the software for developing, testing or production. If you’re downloading a lot, you may get a call of Oracle sales or support why you’re downloading that much. No problem though. You are researching for your job.
Another possibility to consider is to become a partner of Oracle. Also costs you some money, but you may get more benefits than just downloading software.
Regards,
Job.

Danile
August 12, 2015 at 12:46 pm

So useful Thank you

Janet
August 27, 2015 at 11:02 pm

One way to save substantial money is to use a third party like Rimini Street for independent support. They charge 50% of the Oracle support and will provide support on ANY version, so you can get full support on older versions. They also support custom code. Riministreet.com

Need a help on the pricing. Roughly how much it will cost for buying enterprise edition for an application which uses only one database with a web application in a client-WebServer-Apps Server-DB Server environment over the internet and there are about 25 users to connect thru the application. Please let know for 25, 50, 75 and 100 application users.

Dear Surendra,
I’m unfortunately not the one to give you prices, I’m not a reseller. It does not matter by the way if it’s one database or many, it’s about the server the database(s) is/are installed on, and in particular the number of cores and type of cpu. That’s all it depends on. When connected to the internet you will have to buy a processor-based license formally. 1 processor – license for 2 cores when it’s Intel. List-prices are to be found here: http://www.oracle.com/us/corporate/pricing/price-lists/index.html .
Regards.

Hubaib
December 22, 2016 at 3:02 pm

we had purchased Oracle 10g Standard edition NUP 15 perpetual.
If we want upgrade to 12C standard edition 2 with 10 additional users. how the pricing will be calculated?
End of the I need 12C standard edition 2 with a total of 25 NUP perpetual and I will stop using 10g database.
Thanks in advance.

George,
In this example the first year’s investment is likely to be 699000 + 22% support (153.700) = 852.780. But you will negotiate for quite a discount I presume….
The next years you will pay ‘only’ the 22% support costs = 153.700 (listprice). This price will be indexed every year with approx. 2 % (of the supportcosts).
Regardz

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